Organogenesis Soars 38% On Q3 Revenue, Boosts Guidance

Shares of Organogenesis Holdings are surging 37.6% in pre-market trading as the company reported impressive preliminary numbers for the third quarter. The regenerative medicine company expects its 3Q revenue to grow between 54% and 56% Y/Y to the range of $99 million-$100 million.

Organogenesis’ (ORGO) 3Q revenue is expected to be driven by a 63% to 64% rise in net revenue from Advanced Wound Care products to $88.5 million-$89.3 million and a 5% to 7% growth in Surgical & Sports Medicine products to $10.5 million-$10.7 million.

The company now predicts full-year net revenue of $311 million-$314 million, reflecting growth of about 19% to 20% compared to the prior growth outlook of 5% to 6%. It expects to post positive GAAP net income and positive adjusted EBITDA in 3Q and full-year.

Meanwhile, the company also disclosed that it acquired CPN Biosciences on Sept. 17. Organogenesis CEO Gary Gillheeney stated “CPN’s physician office management solution and complementary first-in-line advanced wound care products further broaden Organogenesis’ physician offering and accelerates our office strategy.”

The company added that the CPN acquisition did not materially impact its 3Q revenue. Organogenesis is scheduled to announce its 3Q results on Nov. 9. (See ORGO stock analysis on TipRanks)

Following the update, BTIG analyst Ryan Zimmerman reiterated a Buy rating for Organogenesis with a price target of $10. The analyst expected the company to beat 3Q estimates but is “admittedly stunned at the magnitude”. He continues to believe that the stock is “meaningfully undervalued.”

The Street has a Strong Buy consensus for Organogenesis based on 3 recent Buys and no Hold or Sell ratings. The stock has declined about 21% year-to-date but the average analyst price target of $8.67 indicates a massive possible upside of 129% over the coming months.

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